Loan demand refers to the desire or need for borrowing money by individuals or businesses. This demand can be influenced by various factors, including interest rates, economic conditions, and consumer confidence. When interest rates are low, more people are likely to seek loans for purposes such as buying a home or starting a business. Additionally, loan demand can fluctuate based on the overall health of the economy. During periods of economic growth, individuals and companies may feel more secure in taking on debt, while in times of recession, loan demand may decrease as people become more cautious about their financial commitments.